1. GERMANY

2. Understanding
To analyze and understand the economic, social,
and cultural climate that impacts business
practices in Germany. The following analysis will
highlight the opportunities and threats for
introducing the client’s product into the German
market.

3. Overview
 History
 Demographics
 Geographical Location
 Trade
 Industry
 Economy
 Technology
 Education
 Labor Force
• Political Structure
 Legal Structure
 Religion
 Culture
 Business Environment
 SWOT Analysis

4. History
 1871: German Empire formed
 1914 - 1918: World War I
 1929: Global Depression
 1939 - 1945: World War II
 1934 – 1945 : Hitlar’s Rule
 1949: Germany divided into East and West regions
 1990: Germany joins the EU
 2008: Germany officially declares recession
 2009 (Aug): Germany comes out of recession

5. Demographics
 Population: 80,683,250
 Population is equivalent to 1.1% of the total world
population.
 Ranks number 16 in the list of countries by population.
 Population growth rate: -0.061%
 Birth rate: 8.21 births/1,000 population
 Life expectancy: 79 years
 Population density: 230 per sq.km = 597 per sq.mi

6. Geographical Location & Map
Total: 357,022 sq km
Land: 348,672 sq km
Water: 8,350 sq km
Located in central Europe
Bordering countries: Austria, Belgium, Czech Republic, Denmark, France, Luxembourg, Netherlands, Poland, Switzerland

7.  Germany is made up of 16 different “states”
 Baden-Württemberg,
 Bavaria
 Berlin
 Brandenburg
 Bremen
 Hamburg
 Hessen
 Mecklenburg-Vorpommern
 Lower Saxony
 North Rhine-Westphalia
 Rhineland-Palatinate
 Saarland
 Saxony
 Saxony-Anhalt
 Schleswig-Holstein
 Thuringia
 Climate: temperate and marine; cool, cloudy,
rainfall during summer and winter
Geographical Location

8. Trade
 Exports $1.159 trillion (3rd highest in the world)
 Machinery, vehicles, chemicals, metals and
manufactures, foodstuffs, textiles
 Export Partners: France 10.2%, US 6.7%, Netherlands
6.7%, UK 6.6%, Italy 6.3%, Austria 6%, China 4.5%,
Switzerland 4.4%
 Imports $966.9 billion (3rd highest in the world)
 Machinery, vehicles, chemicals, foodstuffs, textiles,
metals
 Import Partners: Netherlands 12.71%, France 8.3%,
Belgium 7.19%, China 6.89%, Italy 5.88%, UK 4.76%,
Austria 4.55%, US 4.25%, Switzerland 4.07%

9. Trade

10. Industries
 One of the world's largest and most
technologically advanced producers of:
 Iron, steel, coal, cement, chemicals, machinery,
vehicles, machine tools, electronics, food and
beverages, shipbuilding, textiles
 Industry and construction accounted for 29% of
gross domestic product in 2008, and employed
29.7% of the workforce.

11. Major Companies

12. Major Companies
 Volkswagen
 Allianz
 Daimler
 Siemens
 Metro
 Deutsche Telekom
 BMW
 Mercedes Benz
 Audi
 T-Mobile
 Nivea
 Porsche
 Merck
 Adidas

13. Economy
 Largest national economy in Europe
and 5th largest in the world
 Currency: Euro established in 1999
 GDP: $3.353 trillion
 GDP (PPP): $2.81 trillion (6th in
the world)
 GDP per capita: $34,100
 GDP growth rate (2009): -4.9%
 GDP growth rate (2005): 2.5%
 FDI: 503 billion EUR (2009)

14. Technology
 105 million mobile cellular phone users (8th in the world)
 61.973 million internet users (6th in the world)
 German companies represent 15.6% of research advanced
goods worldwide, ranking 2nd in the world (following
US)
 The Federal Government provides funding through
annual grants or endowment capital
 In 2010 the Federal Ministry of Economics and
Technology created a budget of 2.3 billion euros for
technology research and development

15. Education and Labor Force
 99% literacy rate
among males and
females
 Approximately 4.4%
of GDP invested in
education
 250 universities, 100
of which focus on
applied sciences
 95% of universities
and higher education
are public
 School life
expectancy: 15 years
 Labor force: 43.5 million
 Labor force by occupation:
 Agriculture: 2.4%
 Industry: 29.7%
 Services: 67.8%
 Unemployment rate: 7.5% (2009)
 Much higher unemployment rate in Eastern
Germany than Western Germany

16. Political & Legal Structure
 Government type: Federal
Republic
 Chief of state: President
Joachim Gauck
 Head of government:
Chancellor Angela
Merkel
 Elections: president is
elected for a 5 year term
 Legal system: civil law
 Value added tax: 19%
 Value added tax for food:
7%
 Corporate tax: 15%
 Profit generated in
Germany can be subject
to corporate tax, solidarity
surcharge, and trade tax

17. Religion
• Religious freedom
• Protestant (33%), Roman Catholic (33%), Muslim
(4%), 108,000 members of Jewish communities,
and others

18. Culture
 Germans have a strong sense of regional pride
 Reputation for being industrious, thrifty, and
orderly
 Germans usually express their thoughts and
opinions in a direct way
 Separation between private and public relations
 Interest in academic credentials but not personal
life
 Formal communication and greetings

19. Business Environment
 Starting a business in Germany is ranked 88 out of 183 economies
by The World Bank
 To start a business in Germany:
 It will take approximately 15 days
 9 different procedures
 4.8% of income per capita
 German-American business groups:
 German American Business Association
 American-German Business Club
 Germany-USA Career Center

20. SWOT Analysis
Strengths
• Increasing consumer
consumption
• Efficient and educated work
force
• Largest European economy
Weaknesses
• High tax rates
• Slow negotiations
• Demanding employees
Opportunities
• Location
• Tax incentives
• Introduction into European
market
Threats
• Mature market
• Competition

21. Indian Companies entering
German markets.
 Tech Mahindra Expands its Presence in
Germany – inaugurates its near shore
delivery centre in Düsseldorf, Germany.
 Hyderabad-based Rain Commodities
acquired Rütgers Group, German’s leading
manufacturer of chemical raw materials made
from coal tar.
 Acquisition of REpower by Suzlon Energy
Limited, is a wind turbine supplier based in
Pune.